Deutsche Post Delivers A Bumper Dividend As Profits And Cash Flows Rise

By Anna Peel. Originally published at ValueWalk.

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Deutsche Post AG (ETR:DPW)’s full year revenue rose 22.5% to €81.7bn reflecting growth across all divisions and higher growth outside of Germany. Despite increased expenses, due to higher transport costs and increased staffing, operating profits grew 65% to €8.0bn – ahead of targets.

For 2022, the group’s targeting operating profits of around €8.0bn, and free cash flow generation of about €3.6bn.

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The board has proposed a dividend of €1.80.

The shares rose 5.4% in early trading.

Deutsche Post’s Earnings

Matt Britzman, Equity Analyst at Hargreaves Lansdown:

“Deutsche Post may well be the dominant player for delivering letters and parcels in Germany, but the larger revenue streams for the business are tied in with international parcel deliveries and logistics. That’s good news, as the ongoing decline in letter volumes isn’t a trend we see going away anytime soon, but parcel demand is more than offsetting the lost revenue.

Our love of online shopping, accelerated by the pandemic, provided a natural sales boost for the E-commerce solutions business which saw profits rise substantially over the year. Importantly, volumes are looking like they’re stabilising ahead of pre-pandemic levels – especially in the US.

The bumper profits and cash flow meant investors have been well rewarded under the group policy of paying out 40-60% of net profits. Things are expected to cool off from here though, with 2022 forecasts in line with what the group delivered this year. Deutsche Post is unlikely to come out and break any growth records from here on out, but low single digit revenue growth per year with a 4.8% dividend yield has its merits.”

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